Canada To Tax Ride-Sharing Providers Like Uber

Canadian Prime Minister Justin Trudeau and his government announced plans to tax ride-sharing providers like Uber for the first time. According to CBC, the latest consumer tax changes included in Wednesday’s federal budget “will add to the cost of Uber rides while ending a public-transit credit.” The idea behind the decision is to “help level the playing field and create tax fairness.” From the report: The proposed levy on Uber and other ride-hailing services would for the first time impose GST/HST on fares, in the same way they are charged on traditional taxi services. The change will broaden the definition of a taxi business to ensure Uber and other web-based ride-hailing services are required to charge and remit GST/HST, adding to the cost of each trip. The effect on federal revenues will be modest, just $3 million in additional revenue in 2017-18, but the budget suggests the measure is to help level the playing field and create tax fairness. The non-refundable public transit tax credit — a so-called boutique tax credit introduced by the previous Conservative government — will be phased out on July 1. The credit enabled public transit users to apply 15 per cent of their eligible expenses on monthly passes and other fares toward reducing the amount of tax they owe. Ending that tax break is expected to save Ottawa more than $200 million a year. Of course, Uber Canada isn’t so fond of the idea, calling it a “tax on innovation” that would hurt Uber drivers and users. The company said in a statement: “At a time when Canadians spend far too much time stuck in traffic — and people should be encouraged to leave their cars at home, take public transit, and share rides — we should be supporting policies that make sustainable transportation more affordable, not more expensive. Federal tax laws already offer small business owners a break on collecting sales tax, but unfairly exclude taxi drivers. The best way to support taxi drivers and level the playing field is to extend the same exemption to them.”